Wells Fargo loses consumer case over overdraft fees
Wells Fargo & Co. should pay about $203 million to customers who say the bank manipulated debit-card transactions without their knowledge to increase revenue from overdraft fees, a federal judge ruled.
U.S. District Judge William Alsup in San Francisco issued the ruling Tuesday, deciding the case without a jury.
Wells Fargo changed the way it treated customers’ daily debit transactions and cash withdrawals in December 2001, according to the lawsuit filed in 2007. Transactions with the highest dollar amount posted first, rather than in the order they occurred.
The practice resulted in more overdrafts, with customers overdrawing their accounts by small amounts multiple times a day, according to the complaint. The change allegedly was intended to boost revenue from overdraft fees, which ranged from $18 to $35 for each overdraft.
The lawsuit, filed by three customers on behalf of thousands of Californians charged overdraft fees, called the practice unfair, deceptive and fraudulent and sought more than $350 million, plus punitive damages.